Two Federal Reserve Bank of Minneapolis economists who were caught up last year in a mysterious shakeup at the bank’s research department are back as consultants.

The Journal reported last year the bank had fired economist Patrick Kehoe, demoted Kei-Mu Yi from his position as senior vice president and research director and would let go monetary adviser Ellen McGrattan when her contract came up for renewal.

The move came under criticism from, among others, Nobel Prize-winning economist Edward Prescott, who called it “crazy.”Stephen Williamson, a research fellow at the St. Louis Fed, wrote on his blog that Minneapolis Fed President Narayana Kocherlakota “has declared war on his own research department, and seems intent on destroying the place as a research institution.”

The Minneapolis Fed at the time declined to say what was going on, though the bank’s board of directors backed Mr. Kocherlakota.

Now, Mr. Kehoe and Ms. McGrattan are back. The Minneapolis Star Tribunereported Tuesday that both economists , who also hold positions in the University of Minnesota’s economics department, have been hired as consultants to the regional reserve bank.

“Ellen McGrattan became a consultant in early January, and Patrick Kehoe became a consultant in April. We value our relationship with these individuals and the University of Minnesota more broadly,” said Sam Schulhofer-Wohl, the Minneapolis Fed’s senior vice president and research director, in a statement.

The Minneapolis Fed declined further comment, as did Mr. Kehoe and Ms. McGrattan.

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